ment grows, so too does interest in Avon’s business model.
In fact, Avon calls itself the largest engine of economic
opportunity for women on earth. To promote the Avon
advantage, the company is doubling the amount it spends
to promote the Avon earnings opportunity, and it spent a
fair share of it on a 30-second spot during the Super Bowl.
Still, Avon’s corporate sales tumbled 13% in the first
quarter of 2009, due to foreign currency pressure. For
example, beauty sales in the first quarter of 2009 were 12%
lower versus the prior-year period, but increased 5% on a
local-currency basis. Beauty units increased 2%, and units
overall were flat with the prior-year quarter. Active representatives grew 7%.
“We plan to leverage the inherent advantages of our
direct selling business model during this time of uncertainty. We are offering consumers an increased assortment of
‘smart value’ products—great quality products at affordable price points—which contributed to beauty unit growth
of 2% in the quarter,” explained Ms. Jung. “We are also
aggressively promoting our representative earnings opportunity to a wider audience. The early strength of this new
recruiting effort reflects the growing relevance of the Avon
On a category basis, color cosmetics, fragrance, personal
care and skin care sales fell 9%, 10%, 9% and 17%, respectively.
6. Johnson & Johnson
New Brunswick, NJ
Sales: $7.2 billion
Sales: $7.2 billion for skin, oral and baby care products.
Corporate sales: $63.7 billion. Net income: $12.9 billion.
Key Personnel: William C. Weldon, chairman and chief executive officer; Colleen Coggins, worldwide chairman, consumer group.
Major Products: Aveeno and Neutrogena skin care and sun
care products, Clean & Clear teen skin care products,
Johnson’s and Balmex baby care products, Johnson’s skin
and hair care products, Penatan and Natusan baby care
products, Piz Buin and Sundown sun care products, Reach
toothbrushes, RoC skin care products, Shower to Shower
personal care products.
J&J rolled its best-selling Aveeno skin care brand into hair care earlier this year, with the launch of Nourish + Hair Care.
New Products: Skin care—Aveeno Positively Ageless lifting
and firming facial skin care, Clean & Clear Advantage
Blackhead Eraser exfoliating cleanser, Neutrogena Ageless
Essentials Continuous Hydration Night, Acne Wash and
Continuous Hydration Eye, Johnson’s Body Care Forever
Fresh Refreshing Lotion; Oral care—Reach Ultraclean
toothbrush; Hair care—Aveeno Nourish + Hair Care collection; Dabao cosmetics (acquisition); Baby care—Johnson’s
Baby Bubble Bath & Wash. Sun care—Neutrogena Utra
Sheer Dry-Touch SPF 100+ sunblock.
Comments: Few companies have made more strides in the
personal care space than J&J during the past few years. In
fact, all three components of its personal care business—
skin, baby and oral care—posted double digit gains last
year, despite the economic uncertainty.
For example, skin care sales rose nearly 11% to $3.4 billion. The gain was attributed to growing sales of Aveeno,
Clean & Clear, Neutrogena, Johnson’s Adult products and
the acquisition of Beijing Dabao Cosmetics Co. Ltd.
Baby care sales jumped 11.7% to $2.2 billion, thanks to
strong sales outside the U.S.
Oral care sales were up 9% to $1.6 billion, due to a
strong performance turned in by the Listerine mouthwash
line, according to the New Brunswick, NJ-based firm.
Those gains in personal care more than hold their own
when compared to J&J’s total results. Last year, corporate
sales rose 4.3% to $63.7 billion. Net income increased 22%.
Furthermore, last year, J&J spent $624 million on
research and development within its consumer division—
that’s an increase of more than 10% over 2007. In contrast,
total R&D expenses at J&J declined 1.3% to nearly $7.6 billion in 2008.
For the first quarter of 2009, however, corporate sales